we're two weeks away and hours way from question time for rupert muir dorsch in london. >> just 15 days until dwaumt day. >> placing more blame on republicans. >> republicans are still playing games with the debt. >> my way or nothing. one-track man and two-track plan. >> it's a charade. >> the real action is behind the scenes. >> republicans are dealing in a dream world. >> can wishing for a balanced budget make it happen? >> i'm not sure what planet they're living on. >> i find this whole discussion irresponsible. >> the no tax man comeeth. >> they're terrified. >> a teenage boy asks the same question on a prom date, but the answer is no, no, no. >> for once republican presidential candidates have money problems. >> and big money, big problems? >> gop fund-raisers staying on the sidelines.

>> for mitt romney it's 70% maxed out contributions. >> is newt aware he's running for president? >> the arrests continue as the british police close in on rupert murdoch's media empire scandal. >> every day we're seeing more inconceivable things happen. >> abandon ship. in the last 24 hours there have been two high level resignations. zo london's top cop. >> rebekah brooks was released on jail. >> rupert murdoch is supposed to face the scandal head on tomorrow. >> all eyes are trained on parliament tomorrow. >> they're cutting short a trip today to south africa. >> when is he going to do the decent thing and resign? >> congress now has 15 days to pass a bill to raise the debt ceiling before the united states government goes into a catastrophic default on august 2nd. today harry reid announced the senate will meet every day until

the debt ceiling is raised. yesterday david rogers of politico discovered and reported that house speaker john boehner and eric cantor held a secret meeting with president obama at the white house. thegsd, quote, the lines of communication are being kept open, but there is nothing to report in terms of an agreement or progress. tomorrow the house republicans will hold a vote on the tea party's preferred solution to deficit reduction. the cut, cap and balance bill, a bill that would slash spending and make raising taxes even more impossible than it seems to be now. the head of the nonpartisan center on budget and policy priorities described the cut, cap and balance bill as, quote, one of the most extreme pieces of major budget legislation to come before congress in years if not decades. it will go a substantial way

toward enshrining grover norquist's version of america into law. bob will join me later to explain exactly how extreme this republican bill is. the obama administration recognizes the partisan vote on cut, cap and balance for what it is, nothing but a one-day stunt that has no chance of becoming law. so the obama administration are still talking positively about the possibility of raising the debt ceiling. this morning president obama said he and republican leaders were, quote, making progress in the negotiations. and treasury secretariary ty at geithner said this on cnbc this morning. >> you've seen the leadership of the republican party in the senate and house take default off the table as lench for a deal. that's encouraging. >> geithner remains adamant that revenues be part of any deficit reduction deal. >> it's also going to require

through tax reform some modest changes in revenues so we're not sustaining tax breaks for the most fortunate 2% of americans, tax breaks we can't afford. we need to have a balanced package. everybody recognizes a need for a balanced package. there's no deficit reduction deal that didn't have a balanced package with some revenues as part of the deal. >> late last week the white house released a video of president obama it hopes will help explain to liberal obama supporters why he has been open as he has been to compromise with republicans. the video shows the president speaking to a round table of college democrats, republicans and independents in boston at tech boston academy. >> if you're only talking to people who you agree with, then politics is always going to disappoint you. politics will always disappoint you. you know, you think about some

of the issues we've worked on over the last couple of years. you know, i think the college republicans here would say that i was a pretty liberal president. right? but if you read the huffington post, you'd think i was, you know, some right wing tool of wall street, right? both things can't be true. i think that what has to do with is the sense of, you know, we take -- we have a position, and we can't compromise on it. so one of the challenges of this generation is i think to understand the nature of our democracy and politics is to marry principle to a political process that means you don't get 100% of what you want. you don't get it if you're in the majority. you don't get it if you're in

the minority. and you can be honorable in politics, understanding that you're not going to get 100%. and that's been our history. i mean, you think about our greatest presidents. abraham lincoln, here's a guy that didn't believe in slavery, but his first priority was keeping the union. i have the emancipation proclamation hanging in my office. most of the document is those states and areas where the emancipation doesn't apply because those folks are allies with the union, so they can keep their slaves. think about that. that's the emancipation proclamation. right? so here you got a wartime president who is making a compromise around probably the greatest moral issue that the country ever faced because he

understood that right now my job is to win the war and to keep -- to maintain the union. well, you know, can you imagine how sort of the huffington post would have reported on that? it would have been bad, right? think about it. lincoln sells out slaves. right? there would be protests and you'd want a third-party guy. so i think as you guys talk to your friends about getting involved civillsifkly, don't se situation where you're guaranteed to be disappointed. that's part of the process of growing up. we all -- and that doesn't mean you're not principled or focused on or driving around a particular position or a

particular issue. it means that you're sort of pushing the boulder up the hill, and you get it to circle him. other people are pushing. sometimes it's going to slip back. right? >> joining me now is frank rich, writer at large for "new york" magazine. that sounded like a pretty good tutor yal? >> i agree. i think he's entirely right about that. the problem i think he has now is in this pro tracted negotiation with these republicans, he can't make the best case for himself. he's fighting on their turf about deficits. my own feeling is, yes, there have been to be compromises and everything he said is true. on the other hand, every day that obama is not talking about jobs and is talking about cutting spending, he's hurting himself. not in a political sense but in a real sense because people are suffering in this country.

>> frank, your debut piece in "new york" magazine was about this issue and how the white house seems to have veered away from jobs as the driving issue. it's hard to track when you sit where i sit and watch this on a daily basis how that kind of swerve happened. where do you think they lost their way? >> i think they lost their way with health care. i'm not talking about the merits of health care reform, which are enormous, but during that incredibly protracted discussion of health care, even the definition of the bill itself jobs fell by the wayside entirely. the obama administration made not incorrect points that health care reform is tied to economic growth and in a sense to jobs. those are esoteric points, and meanwhile unemployment continued to climb. there was a full year there when

health care and people were angry and the anger was seized by the tea party movement during that hot summer, and i think that's where they dropped the ball. they didn't even convene a sort of nominal jobs council meeting until almost a year after the inauguration. when you think of the circumstances under which he entered the white house, that's just way tardy. >> frank, i want to read a section of your piece, which i think sets the tone of the theme music for the obama administration, if it was a movie or tv series, and it's not a happy tone. it's this. what haunts the obama administration is what still haunts the country, the stunning lack of accountability for the greed and misdeeds that brought america to its gravest financial crisis since the great depression. there has been no legal, moral, or financial reckoning for the most powerful wrong-doers. expand on that, frank.

>> i think that whether you're a republican or democrat, wherever you are on the political spectr spectrum, unless you work on wall street, you have to feel that the taxpayers stepped up to the plate if in a bipartisan plan to rescue essentially the entities, the financial entities that triggered this financial meltdown in 2008. now two or three years have passed. those people are having record profits, record bonuses and not a single banker has gone to jail and no one has been punished and reform has become weak and compromised. meanwhile, the taxpayers who helped foot the bill for saving them are on the ropes. their homes are underwater. people are right to complain and to be angry, or at this point after such a long period of this, depressed and kind of a plague on all your houses with the political system, which is what we're seeing with the

recent polls, particularly this week. >> we saw today that the president could not chose elizabeth warren for the consumer protection bureau that they staestablished. you say in your piece he lost the battle over elizabeth warren long before this year. >> he did. a lot of these fights should have been had before the so-called shellacking of the midterms. i'm hardly the first to say this. there's been this tardiness, this slow response in terms of being pro active about things, whether it be elizabeth warren or jobs or many other things that we could list. >> is that why the lesson he was trying to teach in that politics of governing seminar comes a little late for the people he wants to hear it? that the administration's processes and responses and political instincts leading up

to where we are now has disappointed that group enough that getting that lesson now is coming a little late? >> yes, it is coming a little late, although i don't think it's necessarily tragically late because once there is a republican nominee and we assume there's going to be one, a republican ticket, it may focus the president's base. that said, i think a much bigger problem is not the tardiness of him saying that but the tardiness still of focusing on jobs. the unemployment rate we know is going to be high when he runs and when election day comes, and that's the lost time. that still isn't happening. >> frank, before you go i have to get a quick question in on rupert murdoch having worked in new york media and the news media as long as you have and observed this scene as long as you have. what are hoping parliament asks him to tomorrow? >> well, i think, you know, as many have said, this is almost

in every way following the playbook of the watergate scandal, and we are in a sort of what did you know and what did james murdoch know and when did you know it? i think the gloves are coming off in the news corporation. only a week ago murdoch was saying we've made a few mistakes, but we've really went through this crisis well. they haven't, and they've got to find out what he knew. he's -- i don't know what the penalty is for not telling the truth before parliament, but one would think he would be advised of the truth. >> the "wall street journal" was trying to hold itself up as the great model of murdoch media property, us at the "wall street journal," aren't we great. in the process compromising itself entirely with every

paragraph. >> it not only blamed the new york tim"new york times", it blamed paul steiger the pre-editor of the "wall street journal" and the news organization he runs, they're the problem. we didn't do a darn thing wrong. >> everybody does what those british newspapers are doing? >> everyone does it. but i took that editorial as not only being ridiculous on its face, but a sign of true panic that this virus is spreading to america and news corporation, which is an american company, remember that, not british, really is facing some serious threats to its future now. >> frank rich, writer at large for "new york" magazine, thank you very much for joining me tonight. >> thank you for having me. a "news of the world" whistleblower is found dead as rupert murdoch preparing to appear before parliament.

ru rudegy giuliani said he's an honest man. it's in the rye write. >> announcer: this past year alone there's been a 67% spike in companies embracing the cloud-- big clouds, small ones, public, private, even hybrid. your data and apps must move easily and securely to reach many clouds, not just one. that's why the network that connects, protects, and lets your data move fearlessly through the clouds means more than ever. we love the sun ! i love this slide ! i love knowing coppertone protects across 100% of the uva/uvb spectrum. i trust it. and pediatricians recommend it most. i love this nose. coppertone. embrace the sun.

coming up the latest developments in the "news of the world" scandal. why rebekah brooks was arrested yesterday and what they found in the trash yesterday. plus, how extreme is the republican cut, cap and balance plan for the budget? it makes the ryan plan look reasonable. we'll break down this groofy legislative stunt he next.

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raise the debt ceiling this week. one, a hopeless stunt that everyone knows is hopeless. the other is a last resort plan in which each side claims some sort of victory. today the president issued a rare obama veto threat against the stunt. house republicansle call it the kupt, cap and balance act of 2011. it would cus spending by $111 billion, cap future federal spends at a fixed percentage of gdp, require congress to pass a balanced budget amendment and send that amendment to the states for ratification before granting the president authority to raise the debt ceiling to $2.4 trillion. the balanced budget amendment would also include a provision that any tax increase, any tax increase must pass both chambers of congress with a two thirds

super majority rendering tax increases virtually impossible. house republicans will vote on that bill tomorrow. it is expected to pass the house and then fail in the democratic controlled senate. congress will then consider the last resort plan conceived by senator mitch mcconnell now known as the reid-mcconnell plan which harry reid's involvement has made the only bipartisan effort that would make any progress. it would grant the president authority to raise the debt kreen $2.5 trillion in three increements. at each increment they could vote on disapproval of raising the debt ceiling. mcconnell hopes that vote of disapproval, which would probably pass both in the house and senate, will allow republicans to blame the president for raising the debt ceiling because all the

president has to do to raise the debt ceiling is simply veto the disapproval resolution. in mcconnell's original draft of the plan, no spending cuts would be required. now they are negotiating the possibility of attaches a $1.5 trillion package of cuts to the ried-mcconnell plan and creating a 12-member bipartisan congressional committee to deliver deficit reduction declarations to congress by year's end. joining me now the founder and president of the center on budget and policies bob greene stein, he's the recipient of the moynahan prize of civil and social science. thanks for joining me tonight. >> my pleasure, lawrence. >> walk me through cut, cap and balance. i haven't studied it, bob, because i don't spend a lot of time studying things that aren't going to become law. >> the cut part has cuts so deep so fast starting october 1st, 75

days from now. they're so deep at a point when the economy is this weak that based on mainstream economic estimates it would cost about 700,000 jobs in the fiscal rear that starts october 1st. the cap part is more severe than the cut part. the cap part would put a cap on the total amount of federal spending allowed each year for the next ten years at precisely the level you get to if you do every one of the cuts in paul ryan's budget. it would lock in and effectively require future congresses and the president to do the ryan budget in full with its medicaid, medicare, education and other cuts, and then the most extreme part is actually the balance part. as you mentioned a minute ago, it would hold the increase in the debt limit needed to avoid a default hostage to both houses of congress by a two thirds vote

passing an amendment to amend the u.s. constitution to require for all time through the constitution that federal spending be cut actually dramatically deeper than the ryan budget does, and that it takes two thirds of the house and two thirds of the senate to pass any tax measure that raises revenue including closing loopholes. so you would need 51 votes, a majority in the senate to 18 in the house to cut social security benefits or cut education or basic assistance for the poor or environmental protection, but it would take 67 votes in the senate and 290 in the house to close any tax loophole for any powerful individual, a corporation that ships jobs overseas, the corporate jets, the wall street traders loophole where they pay lower tax at a lower rate than many upper middle income families. all that would become impossible to ever pass because you would

never get two-thirds of the house and two-thirds of the senate for any revenue measure. it's designed to use the constitution to -- well, it's designed first to lock in the ryan budget, but over time to use the constitution to lock in permanently the grover norquist tea party vision of what this country should be. >> we've seen this before where a party needs it cast a particularly partisan vote that has no chance of becoming law so that later, and in this instance maybe very soon after, some of them at least can vote for something that is much less than that. some of them can then strovet f the mcconnell-ried version and say look i wanted to do something much more extreme, but they wouldn't let me. what's striking is how extreme they're willing to go in this kinld of document, including what they would end up doing to social security and medicare. they insist on their website, oh, don't worry.

this doesn't touch social security and medicare, but you can't do that for the federal budget without affecting social security. >> for sure. their budget cuts are so severe that the only way you could hit their targets and not hit social security and medicare hard would be, you know, you basically are dismantling things from protecting the food supply to protecting the borders to, you know, running veterans hospitals, air traffic control and the like. moreover, you know, lawrence, as you know, we do have a long-term fiscal shortfall in social security we have to close, and we need to do it through kind of a mix of revenue and other changes, benefit changes. under their proposal you have to do 100% of the social security solvency through benefit cuts because you wouldn't be allowed effectively to do any tax measures. >> bob greene stein, president of the center on public and private policies. thank you for joining me

tonight. >> my pleasure. a dramatic development in the murdoch tabloid scandal. a whistleblower in the case has been found dead. republican presidential candidates get a surprise. why is the party of the wealthy having so much trouble raising money? introducing mio. a revolutionary water enhancer. add a little...add a lot. for a drink that's just the way you like it. make it yours. make it mio.

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millions of school children across south africa took time to today to join the worldwide tributes for nelson mandela who

sell bralted his 93rd birthday. many wear shirts that read nelson mandela day. that is the name of a project now in its third year, something you can be a part of. the idea is to take 67 minutes and do something, something that's going to help someone. 67 minutes in honor of the 67 years mandela devoted to service of the people of south africa including his nearly three decades as a political prisoner. today people across the world did their part from planting gardens and donating books in south africa to painting benches in new york 'central park. if you're looking for inspiration, you can read ideas on our blog at the last word. up next the sarah palin video disguised as a documentary hit tee ters this weekend and you're not the only ones that didn't see it.

rudy guiliani praises rupert murdoch but not as much as he praised the former police commissioner who now lives in a federal prison. that's in the rewrite. [ male announcer ] this...is the network --

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in the sfot light tonight republicans find that their brand is faming to raise the kind of money it once did. let's start with the opening weekend numbers for the undefeated, a documentary that celebrates sarah palin. it turns out she's no match for harry potter. the palin movie grossed $75,000. that's right, $75,000. it averaged about 7500 per screen for a comparison of documentaries, michael moore's "fahrenheit 9/11" averaged

$27,580 per screen its first weekend. romney is currently leading all of his republican rivals in fund-raising, though badly trailing president obama. romney took in 18 million versus the president's 46 million in the second quarter. most of romney's money came from big donors on wall street such as goldman sachs and morgan stanley. 70% of those donors maxed out and cannot give another penny. only 6% of his total came from donors giving less than $250,000. 47% of the president's total came from donors giving less than $250. and in the latest quarterly reports, the fec documents in which campaigns actually have to tell the truth about fund-raising, we discover mitt romney's big lie. remember back in may when romney claimed to have raised $10

million in a one day phone-a-thon? the political media was really he impressed with that haul. it's the fact that makes they bet on romney to win the republican nomination. the truth? it turns out the lie romney told that day was exactly 20% true. the campaign did not raise $10 million that day. it raised only $2 million. so please rewind all those comments from pundits impressed with romney's $10 million in one day and see how they're statements sound when the number turns out to be one-fifth of that. former house speaker and big spend r newt gingrich ended the quarter over a million dollars in debt without the campaign buying any jewelry at all. the gingrich campaign owes nearly $1 million for the use of private jets. it was half a million dollars for the use of private jets. the name of the company gingrich

uses for renting private jets is -- this is not a joke -- moby dick airways. joining me now is alex wagner, msnbc analyst and social impact reporter for the huffington post. alex, you're the only "last word" guest who could follow moby dick airlines. just go with it. when i saw we talked to the owner of moby dick airlines, of course i mean the staff of "the last word" today and we find out he bought the company in 2006. has no idea why it was named moby dick airlines. he should maybe tonight be thinking of something more jet-like. >> yeah. there are a lot of question marks over the gingrich campaign at this point, and moby dick airlines i think is high up there, if not in the top five. i think overall if we're talking about republicans and

fund-raising prowess, one of the most telling metrics revealed today was that only one in five of the top republican donors who gave to the mccain campaign in 2008 gave to this current cycle of gop fund-raising. we said it before and it's been said again. it's a hugely unsettled field. for someone like mitt romney who is predicated on the notion he can make it rain, the fact the numbers are not close to where they were in the last election cycle is cause for real con stern nation. to your point, lawrence, the fact that 70% of the donors have maxed out means that, look, republican fat cats that want to donate to the campaign have to do that through his pac, restore our future, or do it to the number of conservative leaning sup super-pacs that mushroomed up. >> this kind of situation is bad for the people who are trying to get that establishment money,

the mccain money, the people that are regular contributors to the campaign. it would seem to be good for michele bachmann, because it seems she's shaking a different money tree. >> sure. michele bachmann is someone in her 20s re-elect campaign, i think it was 90% of the 13.5 million she raised came from small donors. she has a lot of grassroots support. she's speaking to evangelical conservatives who feel she's preaching a political gospel that no one else out there is. look, if we're looking at in in terms of the national race and general election, president obama is just far outpacing the republicans. it baring mentioning that, yes, 47% of his fund-raising and his alone came from small donations. he also has a joint committee with the dnc that raise a fair share. he basically has both sides of

the coin. short of rolling mitt romney and michele bachmann up and creating one candidate, you have to two very opposite -- their strengths are at the opposite ends of the spectrum. >> alex wagner of the huffington post who has never flown on moby dick airlines. thanks for joining me tonight. >> thanks, lauren. rupert murdoch's biggest crisis keeps growing after the arrest of his former newspaper chief, rebekah brooks. someone who spoke out about the hacking scandal is dead. that's ahead. up next, rudy guiliani tells us murdoch is an honest man, which is what he said about bernard kerik before kerik went to prison. whoa.

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an ominous turn in the rupert murdoch hacking scandal. a whistleblower in the case has

been found dead nearly 24 hours before murdoch and his son face the british parliament. rudy guiliani is putting his credibility behind murdoch, the same way he did for someone known as inmate number 8488054. somewhere in america, a city comes to life. it moves effortlessly, breathes easily. it flows with clean water. it makes its skyline greener and its population healthier. all to become the kind of city people want to live and work in. somewhere in america,

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man. this can't be something he would have anything to do with. >> well, that wraps it up, i guess. case closed. i mean, a former u.s. attorney comes out and says you're clean, you're clean, right? let's see the rest of that interview about murdoch. >> as you know, "news of the world" owned by rupert murdoch who is a friend and supporter of yours for a long time, there are now allegations that news corp journalists and those working for news corp tried to hack into the answering machines or the phones of 9/11 victims or their families. should there be an investigation? >> there is an investigation i'm sure. intercepting a communication like that is a crime. it has to be investigated. i think what there shouldn't be and we've learned recently with a bunch of criminal cases of different kinds, don't rush to judgnt. give people the presumption of innocence. i think that just how high up it goes is a big question, and it's one we shouldn't jump to

conclusions about. >> have you spoken to mr. murdoch and asked him about this? >> no, i haven't. >> are you confident knowing him -- >> i'll probably see him in the next couple of days or week. i see him all the time at various functions. >> are you confident enough in him? >> he's a competent, honorable man. this can't be something he'd have anything to do with. >> here's why giuliani is not muir dorsch's greatest character witness. number one, giuliani has been in murdoch's pocket for years. i've seen this up close working in new york politics, and i can tell you the new york republican relationship to murdoch is as ugly as you'd imagine it to be. you might expect giuliani to be a little more, i don't know, animated about the criminal exploitation of 9/11 victims. he is the biggest political exploiter of 9/11 we've ever seen. trying to base a hopeless and

ridiculous presidential campaign on the simple fact that he was mayor of new york city during 9/11. the accusations that the fbi is now investigating involve hacking into phones of the families of 9/11 victims in new york city. if the investigation follows a similar pattern to what we've seen in london, it will include examining the possibility of criminal involvement of the police at the highest level. in this instance the new york city police and the new york city police commissioner. the new york city police commissioner at the time in question was bernard kerik, giuliani's personal choice to be police commissioner. he certainly was no one else's choice to be police commissioner. there have been fewer new york city police commissioners than there have been presidents of

the united states. it is the single most prestigious police appointment in the country. and rudy guiliani decided to give it to his former chauffeur, an utterly unqualified high school dropout. how corruptible i was bernie kerik? he's spending tonight in the cumberland federal correctional institute in cumberland, maryland, serving his sentence for eight felony charges including tax fraud and lying to white house officials. bernie kerik was also a tool of rupert murdoch. nothing would stop bernie kerik from doing anything murdoch or his lieutenants wanted him to do. bernie kerik was and is a criminal. he was rudy guiliani's choice to be the list of people the fbi is

going to want to interview in the investigation into what exactly murdoch's phone hackers may have done to the families of 9/11 victims in new york city. and if the fbi can find any dirt on bernie kerik in this case, then kerik will crack and tell them everything he knows about rupert murdoch and his empire. if murdoch needs kerik to stay quiet, then he needs to find a way to get the word to bernie that murdoch can do more for him in whatever is left of his future than the fbi can. murdoch and his new york team know how weak bernie kerik is. if they have to count on him to keep their secrets, they must be very, very worried tonight.

>> my choice ultimately was and is bernie kerik. bernie is a -- has been an exceptional commissioner of the department of corrections. he understands the job of being a police officer. most importantly, he understands the job of being a leader, and he brings a quality of leadership that i believe can give us the opportunity to build on a record that is a very, very difficult one to match. with the hotels.com 48-hour sale, the possibilities are endless. interesting... save up to 50% this tuesday and wednesday only. hotels.com. be smart. book smart. it's schwab at your fingertips wherever, whenever you want. one log in lets you monitor all of your balances and transfer between accounts, so your money can move as fast as you do. check out your portfolio, track the market with live updates.

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it is tuesday in london, and rupert murdoch is now just hours away from testifying to the british parliament, and

bloomberg news is now reporting that the news corp board is considering elevating coo chase kerry to ceo to succeed rupert murdoch if necessary. the phone hacking scandal just keeps growing, and the arrests and resignations keep coming. assistant police commissioner john yates resigned from his position today, following criticism of his refusal to reopen the phone hacking investigation in 2009. yates is reported to have spent just eight hours reviewing 11,000 pages of evidence. his resignation came as british police confirmed today that a second former "news of the world" employee was employed by scotland yard. while the editor of the irish edition of "news of the world," alex morinchuck, was also employed by police as a ukrainian language interpreter with access to highly sensitive

police information between 1980 and 2000. yesterday, it was revealed that former "news of the world" executive neil wallis worked as a public relations adviser to the police department. that news forced britain's top cop, sir paul stephenson, to announce his resignation as police commissioner. former news international ceo rebekah brooks made more news today when detectives found a computer, paperwork, and a phone in a trash bin near her home. her husband claims a cleaner must have mistaken it for trash and put it in the bin. rebekah brooks was arrested and questioned for nine hours sunday, but no charges have been filed as of yet. brooks, who resigned from her post friday, is also scheduled to testify with murdoch and his son james before parliament. and in a bizarre and cinematic twist, scandal whistle blower sean horror was found dead

today. the former "news of the world" reporter found out that andy coulson was aware of phone hacking by his staff. andy coulson the then "news of the world" editor who went on to work for prime minister david cameron. joining me now, sarah ellison, contributing editor at "vanity fair" and author of "war at the "wall street journal."" sarah, the "wall street journal" today wrote a very defensive editorial for the whole bloomberg -- the whole murdoch empire. how did you read that editorial? >> well, i was sort of surprised that they took such a defensive stance, given that the "wall street journal" doesn't have anything to explain at this point. and it's not really the edit page's role in my view to defend its corporate parent. so i thought that was actually something after having spent so many years at the "wall street journal" that was unnecessarily

putting the reputation of the "wall street journal" on the line, given everything that's been going on outside of the "wall street journal" at "news of the world" and other parts of the company. >> and what do you make of this bloomberg report they are making plans for what happens if rupert murdoch cannot remain in his position? >> i think that is one of the many unthinkable thinks that has become very thinkable lately. it used to be that rupert murdoch and news corporation were very much one and the same. no one could imagine the company without him. i think now the fact that members of the board are questioning his judgment and his handling of this affair are very much part of the whole puncturing of the myth of rupert murdoch that we've seen going on for the past two weeks. and i think it really is part of the broader question of whether or not he has the kind of judgment that's necessary to lead the company into the future, which is just again one of those things that you never

thought you'd really be saying about someone like rupert murdoch. >> are there members of his board who would be willing to take an action against him? >> it's been a very captive board for a long time. they have all pretty much fallen into line with exactly what he wants to do. but we have heard recently that people like tom perkins have raised questions about his judgment. i think that the reputation crisis is so bad at the company right now that people realize they have to take some kind of action because it's either their own personal reputation on the line or that of rupert murdoch and newscorp. so you have people like joe klein who are now over there working for news corp trying to contain this scandal. if they don't do that, it'ses their credibility that's going to be shot too. >> sarah ellison, thank you for joining me tonight. >> thank you. >> the show show show is up next. good evening, lawren